The privacy of the transaction is the limits of security coming from Blockchain

In the summer of 2016, a defect in the most famous ETHEREUM organization in the condemned referee led to the theft of more than $ 50 million of Ethereum (Eth) – 4.5 % of all Ethereum in trading at the time – an accident that has become colloquially known as Dow penetration. The episode was characterized by a decisive moment for Blockchain security, with the industry response while enhancing smart nodes scrutiny, official verification, and timely, the safer programming frameworks. It was an innovation moved by crises, pure and simple-but he played a major role in pushing Blockchain on his long way to mature.

Today, the industry stands at another decisive turning point. This time, though, the crisis is not rooted in the panic resulting from an isolated individual incident, but instead, through the most treacherous weakness that has become inherent through the ecosystem for encryption so that many fail to identify the consequences that continue to be attached.

I am talking about the privacy of treatment.

Daily theft

Every day, billions of dollars flow into cryptocurrency transactions via public Memeples – rooms where transactions sit before processing. In these transparent gatherings, examine advanced robots for profitable opportunities, and extract value through front and sandwiches attacks.

This is not a rare event, too. These attacks occur thousands of times every day, as volunteer actors steal billions of ordinary users through automated exploitation. This theft is organized, clear and simple, with strong, strong players who systematically extract the value from ordinary people. This extraction, known as the harmful MEV (the maximum extractive value), has grown from theoretical anxiety to billions of dollars that undermine the basic fairness of Blockchain systems.

How we got to this point is to clarify the advanced challenges that the industry had to deal with. Bitcoin’s work has resolved the main problem of achieving consensus in an unreliable network. Smart contracts of Ethereum enabled programming transactions but have introduced new attack tankers. Energy efficiency is improved with questions about verification centralization.

Bring all progress new challenges – and in time, solutions. But the peculiarity of the transaction represents a different kind of challenge completely.

Training by design

Contrary to previous security problems that can be addressed through protocol corrections or strong coding practices, the privacy challenge stems from the basic design selection: transparency inherent in public audience groups. This transparency, which often preaches as an advantage, is accountable, in turn has become essential.

When every hanging transaction is visible to all participants, those who have the fastest robots and the strongest communications can exploit this lack of consistency of information in their favor. It seems as if distinguished traders can see anyone else’s orders on the stock exchange before implementing them and jumping forward.

Early recognition of this issue provided two clear but different pathways: preventing theft through systematic changes or setting priorities for personal profit through exploitation. The main players chose the latter, and to build an advanced infrastructure that did not only facilitate this practice, but also accelerated it – adding legitimacy to this in this process.

This design defect is not only undermined the efficiency of the market, but it betrays the primary Blockchain promise to create a fair financial system that can be accessed for all participants.

The response from the industry – and still – is not sufficient, and turned confidence from protocols to the brokers in a misleading attempt to privacy that undermines the institutional principles of Blockchain for decentralization and access without permission.

Just like running Blockchain on some central servers that will resolve the ability to expand, but it defeats the purpose of decentralization, the central solutions that create special transactions channels to customize the problem instead of solving it. They convert confidence from the protocol to the intermediaries – a step back from Blockchain’s main promise of unreliable operation.

Stadium settlement

The real solution lies in advanced encryption, specifically in threshold encryption systems. Unlike traditional encryption, with one key holding a full power, the threshold encryption distributes this responsibility across multiple independent limbs.

By encryption of transactions in MEMPOOL through the encryption of the threshold, we can create a system where no single participant can access the details of the one -sided transaction before implementation, which eliminates the advantages of information that allows harmful MEV extraction with a guarantee that the treatment of each user receives equal transaction regardless About his technical skipping or financial resources.

Although this may seem complicated, mechanics are already elegant in its simplicity. When users send the transactions, they are encrypted with a general key created cooperatively by network keys. These encrypted transactions sitting in Mimpol are immune to the front because their contents are still hidden. Only after the completion of the transaction is completed in the mass, issue their keys from the shares of the decoding key, allowing the treatment to be processed.

Think about it as a digital cellar that requires multiple independent keys to cooperate before revealing any treatment details. Just as the consensus has turned the consensus with maintaining safety, the shift towards Mempools must be the next lead technical teacher for Blockchain. Both transformations require rethinking basic assumptions while maintaining the basic characteristics that make Blockchain technology valuable.

Restore confidence

But this is just the beginning. The industry is already exploring more advanced solutions. The fully homogeneous encryption threshold (FHE) and the non-discrimination (IO) promise to enable the account directly on encrypted data, and perhaps change the full form of the Blockchain account. Imagine smart contracts that can address sensitive data without deciphering them and encrypted applications where all interior details remain hidden – these are ideas that can have profound effects on maintaining privacy.

Each of these developments is a small component of a much larger path towards a more special future-where privacy is not seen as an additional but an essential feature of Blockchain systems.

But let’s be clear about what we mean by privacy in this context. Privacy is not related to hiding or ambiguity – it has the power to define the information she shares, when she shares it, and with whom. Privacy revolves around protection against bad thieves and actors who take advantage of transparency to achieve their own gains.

Think about it for a minute. Do you want any company in trading strategies or commercial operations for competitors in real time? Of course not. It is necessary to get this right to restore the basic fairness that has been paid for the flow of demand (PFOF) and some high -frequency trading in Wall Street and MEV malignant on Ethereum has been systematically destroyed.

As a society, we are now standing at a crossroads. One of the path maintains the current situation, allowing the systematic theft to continue without deterrence. Other tools have proven encryption solutions that can restore fairness and privacy for Blockchain systems.

Mathematics and encryption to solve this exists today. The question is whether we have a vision to start its use and the will to ensure that our technology reflects the principles and values ​​that our industry was founded on.